Joaquin Almunia kommentaar: I very much welcome the vote by the Latvian parliament and the support given by the social partners to the package of budgetary savings. This is necessary to reduce the deficit to levels that are consistent with the need to overcome the present difficulties with the financial help of the EU and other contributors. The reduction in the deficit will have to continue in 2010 and in the next years, so as to anchor the economy in a credible and sustainable path. This should be done while preserving social fairness and avoiding that the cost of the adjustment falls on the most deprived parts of the population."

Most areas in the markets have now discounted a V-shaped recovery. Any doubt will trigger a rapid reversal in prices. I continue to be extremely sceptical and see recent events as part of a 1930s-like, long march to revulsion. Talking about long marches, nowhere in the world fills me with more scepticism than the Chinese economic recovery. The continued enthusiasm for all things China reminds me so much of the way investors were almost totally blind to the fact the US growth miracle was built on sand. China could be the biggest disappointment yet.

The British unemployment rate in the three months ending in April rose to 7.2%, up from 6.5% in the three months to January, the Office for National Statistics reported Wednesday. The number of unemployed totaled 2.26 millions in the three months ending in April, a rise of 232,000 from the previous three-month period and a rise of 605,000 from the same period a year earlier. The seasonally-adjusted number of persons claiming jobless benefits rose 39,300 in May, equal to 4.8% of the workforce, the ONS said. Economists had forecast a 65,000 rise to 4.9% of the workforce.

Discipline is the bridge between goals and accomplishments. -- Jim Rohn

One of the hardest things to do in the market is to determine whether a pullback after a big move is just a good buying opportunity or the beginning of a change in trend. If we are correct about a pullback just being a dip, we can buy into the weakness and make some good profits, but if we are wrong and find ourselves stuck in a market that is rolling over and changing trend, the losses can mount quickly. Unfortunately, there is no way we'll ever know for sure which approach will prove to be the right one until after the fact.

The key to dealing with this dilemma is to have a disciplined money management approach. Even if you believe we are seeing nothing more than a temporary dip, you still need to have a line in the sand where you take losses just in case you are wrong. One of the very frustrating things about disciplined money management is that no matter how smart you might be, you will invariably be stopped out of positions only to see them immediately reverse back up.

No money management system is going to deliver perfect results, but that isn't their primary function. The key function of money management is to reduce your risk of big losses should the market not act the way you hope it will. You have to pay a price for that insurance, and that price is that you will sell some stocks at less-than-optimal levels.

We are at a market juncture right now where it is extremely important to be disciplined. For more than three months, the market has made fools of anyone who thought that we were just seeing a bear-market rally that would soon fizzle. Time and again we have barely dipped before continuing higher. With that pattern in mind, there is going to be a strong inclination to give positions more room so you aren't left out when things turn back up again.

We may indeed reverse and go straight back up (just like we did in May) after a few days of weakness similar to what we are seeing right now. We have broken some important technical support and the momentum action has turned poor, but we haven't see any really panicky action like we did back in January and February.

The important thing is to control your risk and not let your hope that the bear market is over keep you from making moves to limit losses. Yes, you might end up selling at just the wrong time if you set stops too tight, but you can always buy positions back. A lot of folks have a mental block about buying something back that they just sold, but it can be very good strategy. Just think of it as paying an insurance premium.

After two days of weak action, the market is probably due for a relief bounce. The key will be whether the buyers can generate the same vigor they have had so often when they have come roaring back and run over any bears. It is looking like the dip-buyers may be losing some energy, but they haven't been tested yet. Be tough with your trading discipline and don't let losses grow if things don't work the way you think they will.

We have a minor positive start on the way. I see some good analyst upgrades, but guidance from FedEx (FDX) is worrisome. ----------------------------------------------Ülespoole avanevad:

IS BOOMING MONEY SUPPLY REALLY INFLATIONARY? Not when you are in a liquidity trap, which is where we are. The problem with the Fed's monetary experiment is that the money supply boost is still not circulating through the economy but rather sitting on bank balance sheets. At least there's no delinquency risk with net free reserves. Paul Krugman uses some great historical examples in his Monday column in the NYT (Stay the Course). Between 1929 and 1939, the monetary base doubled (and the dollar devalued) and yet prices deflated 19%. In fact, despite seven years of New Deal stimulus and rampant FDR incursion into the economy, the 1930s ended with the unemployment rate at 15%, the CPI declining at a 2% annual rate and the level of GDP still below its 1929 peak. Between 1997 and 2003, Japan's monetary base surged 85% — deflation pressures remained intact. We just do not believe it is still appreciated that when the economy slips into a deleveraging phase, which by its nature involves asset liquidation, debt repayment and rising private sector savings rates, it takes years before the economy makes the transition to the next up-cycle and only then with massive amounts of fiscal and monetary stimulus.